We've been told that public colleges and universities have entered a New Normal. It's supposed to be stable and sustainable. It gives colleges less--to make them learn to do more.   Happy scenes like commencement at San Francisco State, at left, are to carry on unimpeded, with lower costs but no loss of learning or research.

This week, this insidious narrative was again undone by several stories about San Francisco State, UC Berkeley, and their private cousin Stanford University.

1. Defunding Democracy

First, a rehearsal: The democratic vision of U.S. higher ed was that the burgeoning masses could get a degree that was cognitively the same as that of elites, even though they lacked the latter's social networks and private resources.  Twins separated at graduation, one going to Stanford, say, and one to UC Berkeley, with a sibling already enrolled at San Francisco State, would have student experiences that would differ in trappings but not essentials.  The great faculty and facilities at the two public universities would allow them to offer cognitive gain that was functionally similar to that received by the Stanford twin, who would have social but not intellectual advantages.  No one thought they were dooming public university students to second- or third-tier status in a secret caste system.

Of course four years of Stanford seminars, where the student:faculty ratio is now 4:1, had advantages that SF State's 50-student courses or Berkeley's 600-student lectures did not. But economists calculated that by 1980, public colleges spent 70 cents for every dollar spent by the privates (p 237). The assumption was that the gap would continue to close. As it did, artificial and unjust barriers of gender, race, religion would continue to erode as the wider society became more prosperous and more enlightened.

Instead, by the 1990s public colleges were spending only 53 cents on the private dollar.  The five public flagships that had been in the top 20 in US News & World Report's first ranking, in 1987, later all fell out of that bracket (p 237).  By 2013, public research universities were on average spending 45 cents on the private research university dollar.   Public masters universities like SF State were spending 21 cents.  Community colleges, the favored political cure to our national attainment ills, were spending 14 cents on the private research university dollar (all from Figure A2).  Meanwhile, UC Berkeley's Pell Grant rate--a proxy for low family income--is 35% while Stanford's is 15%. Since UC Berkeley enrolls over 27,000 undergrads to Stanford's 7000, UC Berkeley educates 9 times the number of low-income students each year.  It has much less money per poorer student to educate them.

We have been taught to call this efficiency.  It is grossly inefficient, socially speaking. It is also unjust.

2. A Tale of Two Universities

This week, Nike chairman Phil Knight announced that he was giving $450 million to found Stanford's Knight-Hennessy Scholars program, which would bring the best and brightest from around the world to study at Stanford so they could return to their home countries to address major problems there.  Press coverage likened them to the Rhodes Scholarships. Stanford will apparently contribute another $300 million, for a total endowment of $750 million.  The statements of the two principals, donor Phil Knight and Stanford president John Hennessy, made it clear that the goal is to create global leaders.  KQED's Forum interview with Mr. Hennessy features repeated claims that the program will not only offer the best academic training but will create the world's top leadership in every domain. The key word was leadership.  Hearing the elaborate plans for special treatment of a very small group of international students, I concluded the program is tightly focused on deluxe training for a worldwide super-elite.  They would preside over the broad democracy of intelligence rather than be part of it.

The micro scale of the student output is important.  Leaving aside the tarnished public image of university fundraising, increasingly defined as rich people giving huge, unnecessary donations to rich colleges, it looks as though the gift money goes to cover full cost of attendance for a total of 100 students for three years.   The program will have at most 300 students at a given time. A 5% annual return on the overall endowment will generate $125,000 per student per year.  This is not enormously more than what a private research university normally spends on each student ($90,000 in the Delta Cost figures linked above). And yet Knight-Hennessy has overnight become the #130 endowment in the country, about the size of Bucknell University's, itself a fairly posh school with 3,565 undergraduates. It is twice the endowment of that of the University of Wisconsin system.  In short, the Knight-Stanford gift is effective as micro-scale elite training but woefully inefficient as a mode of democratic higher education.  It just isn't part of that world.

This might seem unfair to the Knights, since they have given generously to Oregon's flagship public university, the University of Oregon.  But of the $1 billion the Knights had donated to charity prior to this gift (on an estimated net worth of $19 billion), $34.7 million went to public university campus academics (non-medical).  The figure rises to $76.4 million by counting their gift to UO's athlete tutoring center.)

Meanwhile, also this week, San Francisco State professor Joanne Barker revealed that the SF State central administration has proposed that the College of Ethnic Studies be cut by 13.8% next year. This would bring post-2008 cuts to 25% of COES's budget (in nominal dollars).  COES is the only college of ethnic studies in the United States and its founding and development are a matter of national legend.  Each year it teaches most of a Stanford (6000 enrollments) with a current-year budget of $3.6 million.  COES is required to do this, on a per-student budget, expressed as a share of 6/7ths of Stanford's instructional expenditures -- which I estimate from this financial report (p 54) and the Delta averages to be between $440 and $540 million--well, the fraction is too gruesome even for me.

In Prof. Barker's post, I was riveted by what few faculty discuss: the public college working conditions as they affect student learning. She noted that Cal State defines their basic teaching load to be 5 courses a term, which is similar to the load at a community college or high school. Faculty members then buy out courses with administration and research, generally one course per term for each activity.

The other three courses they teach, and they are expected to enroll 50 students each. The overwhelming majority of faculty in the CSU are not provided with teaching assistance. This means that faculty are expected to teach three courses and grade the work of 150 students per semester without aid.

Ideally, a humanities or social science course would assign each student two papers in a semester and then offer detailed grading of the kind that allows students to see their full range of issues and address them.  But one professor can only grade 300 papers on top of the rest of their teaching, research, and administrative job by sacrificing the rest of their life.  The other solution is to cap the quality of feedback at a modest level, by replacing at least one paper with an exam and standardizing the exams as much as possible.  The normal workload sharply limits the intensity and detail available to an individual SF State student.  Politicians who like the "efficiency" of these low costs are not thinking about the cost to educational quality for non-elite students.

CSU faculty are also expected to do research.  These days, state college tenure-track faculty have research university doctorates and the intellectual lives and research ambitions to match.   SF State students are supposed to be exposed to the same up-to-date material as their siblings at research universities in order to avoid the educational class system we're discussing here.

Prof. Barker described the SF State/ Cal State system for research support:

The only viable support for faculty research—the foundational basis on which curriculum design, publications, and conference presentations are produced—has to come from a modicum of CSU and campus-based grants and one-term sabbaticals. These grants and awards are highly competitive. 

At SFSU and in the COES, faculty wanting time for the professional development of their research and writing or for travel expenses to vet their work at conferences and workshops generally must secure outside funding from equally competitive sources. The policy has been that faculty are “charged” $10-12,000 per course per term for course release. Meaning, effectively, that a faculty person who wants time off teaching for research and does not have a CSU or SFSU grant to do so must secure an outside grant or fellowship at a minimum of $30,000 for a term and $60,000 for the academic year. Since most national fellowships, such as the Ford Foundation, average $45,000/year, CSU and SFSU has created a situation that essentially disqualifies faculty from being able to apply for these awards unless they are willing to make up the difference out of pocket.

Our colleagues in the CSU system already teach too much to do the expected research at scale, and apparently are also asked to supply from their own salary a subsidy that normally comes from "institutional funds."  These conditions demand their heroic efforts to maintain their research programs while single-handedly developing higher-order skills in 150 undergraduates at a time.  The simple reason is that the CSU system is not funded to support research, and the very limited funding they do allot to this will not go in any quantity to the arts, humanities, and qualitative social sciences.

This is the context in which the New Normal demands the public university be cut yet again.

3. Berkeley's Failed Formula

The other widening gap is between a university like Stanford and one like UC Berkeley.

The post-2008 cocktail of cuts and austerity has been very hard on UC Berkeley's budgets.  Officials followed the post-public formula to the letter: accept the public funding era is over and keep increasing fundraising and sponsored research.

They also renewed the fixation on inefficiency.  The Birgeneau administration hired outside consultants, and they generated a plan for administrative savings called Operation Excellence (OE), which had a number of component programs.  The idea was that the projected annual savings of $75 million would help the campus weather the latest round of major public funding cuts (from 2002 to 2012, UC Berkeley's state general fund appropriation went from nearly $500 million to under $300 million per year, a drop of 54% in real terms).

Some of OE's programs made a lot of sense, like simplified equipment sourcing.  Others would provide little or no return in exchange for degraded service, like the herding of departmental staff into a separate building off campus under Campus Shared Services.  The promises of savings were always overblown (see "Bain's Blow to Berkeley"), and the implementation seemed to be undermining the efficiency of distributed innovation rather than reinforcing it. Faculty were being separated from staff, and it appeared that different departments were going to get different speeds and quality of service depending on their ability to pay, United Airlines style.

But neither the staff segregation nor the new service inequalities have had budgetary benefits. The overall OE annual savings are about half of the projected $75 million (page 12).   Campus Shared Services has failed completely. Its annual savings are now expected to be zero--actually negative, since the campus has lost millions on this program so far.  Even if everything had gone according to plan, OE is a classic example of a "nickel solution"-- $75 million a year is 3.33% of the campus's $2.25 billion annual budget, and this benefit would never have fixed larger budgetary problems.

Some of these figures come from outgoing Vice Chancellor for Finance and Administration John Wilton's 2013 budget commentaries, "Time is Not On Our Side" (Part 1 and Part 2).  The structural deficit was already well known to officials by then, and in fact had been a topic of discussion quite a bit earlier.  But the strategies that were part of the deficit's formation were still expected to fix it.

The half-way privatization model has been broken for a long time, and is now scaring everyone, even the Sacramento Bee and Los Angeles Times editorial boards.  They are right to be scared. Public flagships no longer have the resources to do teaching and research at the top level of quality--and for new social conditions-- that the state assumed for all its non-elite students.

I don't know which of the old ideas UC Berkeley officials thought would fix the structural problems. Perhaps they hoped that growth in non-resident tuition, coupled with a doubling in professional school fees (since 2005), plus a few big fundraising wins, some new industry partnerships, and more non-operating revenues, would get them to the other side of the Jerry Brown austerity era where they would see serious tuition increases again.

Perhaps they didn't think they could fix the structural problems.  John Wilton made this case very well.

While it is tempting to believe that reductions in our operating expenses are the key to long-term stability and sustainability, it is fairly easy to illustrate that it is not possible for costs to become consistent with current revenue projections if we are to maintain the current standards of access and excellence.

Since cost-cutting wouldn't actually work, and since, as Mr. Wilton had observed, Berkeley now competed for its three largest revenue streams (tuition, research, and philanthropy) against every other university in the country, Plan B would be, by default, a reduction in quality.

Plan A has of course always been restored public funding, which is the only way to pursue the democratization of intelligence.  But senior managers seem to have given up on that.

4. Berkeley's Faulty Forum

This is the context for Chancellor Dirks's "Announcement of Comprehensive Planning and Analysis Process."  Its most important move is to announce the structural deficit.   It also describes short- and long-term measures. They won't have much effect: they have all been in place for years, and their effects are already baked into the budgetary cake.

The sole exception is "realignment" of academic structures.  That will make a meaningful difference only if it involves (a) mass staff layoffs, perhaps in the company of (b) faculty layoffs, accomplished by shrinking some academic departments and closing others.   Staff groups have already been raising the alarm about this prospect, which was the lead-in to the Forum the campus's senior leaders held last week.

Chancellor Dirks et al. defined four major planning areas: athletics, fundraising, administrative initiatives, and academic realignment.   Faculty members from whom we've heard thought there was little news about the actual planning.  One wrote,

Well,

(1) it would have been considerably shorter if four words had been proscribed:  "excellence," "strategic," "synergy," "realignment." 

(2) Provost Steele offered no substance except at the end, when he pretty much admitted that they plan to solve the problem of (a) increased enrollment; (b) shrinkage of graduate programs/increase in $ amount of each fellowship by.... increasing lecturers. 

 (3) on fundraising, they claim "the work shows that every dollar returns $7."  I have since asked someone in the relevant office for the numbers and have been told it doesn't have that information. In the Forum, they parried the fact that 99% of giving is restricted by claiming gifts have funded buildings, endowed chairs, etc., which is of course true but not to the point about covering operating costs.  The foundation and campus board get representatives on the advisory committee for the "Office of Strategic Initiatives."   

(4) Sibley auditorium was FILLED, and faculty asked many good questions--about how much of our structural deficit is debt servicing (I think they said that's now at $100 million, and will grow soon to $150 million, but they're seeking debt relief from UCOP).  One asked, why not use cash to pay down principal, instead of trying to "generate revenue" by entirely "realigning" a university that is, academically speaking, working well.  Answer to this and to all:  "everything's on the table" (but really, we only have 3 years of savings, so we can't do what you're asking). 

(5) they're pretty much using the PhD job situation to justify their plans for expanding the # of money-generating Masters programs, both professional and academic.  Again, a lot of push-back against this:  one scholar saying that if Masters programs are to be good, they need faculty attention, which means less faculty attention to undergraduates.  Answer to this and other objections: not if it's managed well--look at U Chicago's MA program.  No acknowledgement of completely different scale and income of U Chicago. Dirks said "societal changes" warrant move to Masters anyway; no jobs, people don't want to spend 8 years of life in grad school, etc.

That writer also noted that Berkeley Faculty Association Co-Chair Michael Buroway made a statement that seemed to speak for many faculty, judging from the applause that greeted his questions: 

Over the last decade there have been a number of costly ventures – from the renovation of the stadium to the Lower Sproul Plaza development; from Operation Excellence and Campus Shared Services to the experiment in On-Line Education; from the Energy Biosciences Institute to CITRIS. Each project is rolled out with great fanfare as a lucrative investment to be recovered sometime in the future, whereas each one has proven to be a financial albatross. There seems to be systemic pattern of fiscal irrationality. But from where does it come? 

If I may answer my own question - a major part of the responsibility lies with the administration itself. The university appears to have been hijacked by what we might call spiralists – those who advance their careers by spiraling from one organization to the next. They stay for a few years, advancing their portfolio with a signature project that then launches them into a higher orbit and plunges the university into a downward spiral of accumulating debt. The latest case in point is the outgoing VC for Finance and Administration, John Wilton, who arrived five years ago to replace another spiralist, Nathan Brostrom. Like Brostrom, Wilton is now moving on, leaving behind a train wreck. 

Will Wilton’s replacement be yet another spiralist from the financial world?  Why don’t we replace him with one of our own great economists? If we are a recruiting ground for the chair of the Federal Reserve Board and for the Director of the National Economic Council, why not for the VC for Finance and Administration?  

I’ve really only got one question: is the administration prepared to acknowledge its own contribution to our annual deficit and, if so, what does it propose to do about it?

There were apparently no answers to these questions.  But the trend is clear. Without restored public funding, the New Normal means the permanent downgrading of all levels of public higher education, and the reversion of top-quality learning and research to small elites.  Unless we restore cut public funding, California will continue to pioneer educational post-democracy.

Retirement Options Feedback

The UCSB Staff AssemblyExecutive Board, which is comprised of policy covered staff, believe that future retirement options should be offered equally to all employees, including staff. Staff are the backbone of the University of California (UC) system and we are a fundamental component to ensure that the UC mission is realized. Thousands of bright and dedicated staff choose the UC as their employer and our daily duties, such as advising students on which courses to take, assisting faculty with writing grant proposals, and balancing department budgets, are integral to making the UC work. Staff are crucial in making the UC system successful and they should be given the opportunity to take advantage of the same retirement benefits that are being offered to faculty.

Benefits, including the retirement package, are one of the strongest tools UC has for recruiting and retaining employees. The new proposed retirement tier has been presented with the impression that it will not directly affect current UC employees.  However, this is not the case, since it will impact the UC's future and many current employees will continue to work here 10 to 20 years from now. Any lessening of the benefits injures UC's ability to attract and keep the best and brightest staff.

Additionally, we support the faculty's concerns that the proposed tier will affect faculty recruitment and retention. Salary is valued and important when attracting new hires. However, in order to keep these employees, we must invest in them and their futures. We feel strongly that whatever retirement options are chosen should be offered equally to all employees. If you want to hire future quality employees you have to keep the same level of retirement opportunities available: do not offer anything less. It is not the pay that keeps dedicated, hardworking supportive staff at the University who give of themselves and more. It is the promise that if we work hard and invest in our careers at UC we will have invested in our future.

I realize there are many other factors, but the geography of the state inequality boom does not put the University of California system on the side of broad income growth.  Take a look at the figure at left, from a new report by the California Budget and Policy Center.

Of the top 12 regions that have seen the highest percentage of growth go to the top 1%, 7 have UC campuses.  Of the others, one has Stanford and SJSU, another has a Cal Poly, and two are something akin to agricultural plantations.

3 UC campuses serve more egalitarian regions (Davis, Merced, and Riverside).  They are also lower-income--and not associated with California's famous tech economy.  (I mean tech broadly to include related (and well-paying) financial and other services, and retain the murkiness of the term, whose aggregate employment generally remains less than 10 percent of any regional total.)

Research universities do not only serve their local regions, but there is national pressure for them to shift the balance back in this direction, and UC's D-M-R campuses can plausibly invoke regional service in their pitch for funds. Partial proof was the Riverside campus's successful bid to start a medical school that the state promised not to fund properly, but that carried the day on the basis of its location in a medically-underserved region that could also use new jobs.

What can we make of the kind of stretched correlation I've just produced? We can focus on the politics of the links rather than on the economic causalities.  The latter are very hard to identify. But politics generally works with exactly this kind of loose association.

Two generations ago, UC's association with the "knowledge industry" was an association with rising incomes distributed widely in the population. This reflected the rise in general individual productivity, which could in turn be traced to all levels of educational advancement, particularly bachelor's degree attainment.  UC could say it was building a broad middle-class. Politicians of both major parties had little reason not to fund that.

Today, UC's association with the tech economy is an association with the inequality boom.  While the productivity of middle-income people does not rise more slowly than those at the top, their wages do.   (Explanations for income growth at the top are generally about market pricing power of specific skills, not about their superior productivity growth.)   Going to a UC does not now insure that your wages will rise with your increased productivity.

Of course it never did insure this, and universities cannot fix the plutocratic tendencies of the tech economy, by which I mean that cluster of practices that insure that the "regional advantage" we touted in the 1990s will never produce a tech manufacuturing empire staffed by white-collar armies on the model, of, say, the South Bay aerospace empire of the 1950s and 1960s.  The point is that UC can no longer make the same political claims to resources on the basis of an ever-more democratic distribution of knowledge and income. Compared to CSU and the CCs, it is comparatively rich and also located in fairly rich places that look the least in need of public funding help.

The solution is not only to stress the large numbers of low-income students enrolled at UC. (UC policymakers should stop weakening this important case by exaggerating the immunity of low income students to burdensome student debt).  The solution will involve explaining the concrete contribution UC instruction and research make outside of the tech industry as well, and for the vast majority of California counties that have no UC-sourced start-up companies and limited tech employment.   All UC disciplines make major contributions to the present and future workforce.  Until UC can make the broader case for all the fields and all the skills it offers, budget politics will continue to run against it.

In the context of ongoing doubts about the value of Defined Benefit pensions to public institutions and the people who serve them, we offer two pieces of essential reading for your long weekend.  One is the UC Academic Senate Chair's letter to President Janet Napolitano (Hare) about the Senate review of the recommendations of her Retirement Options Task Force (ROTF). Posted a day after the Academic Senate Assembly rejected the ROTF recommendations in their entirety, this 6-page letter summarizes over one hundred pages of Senate commentary from across the UC system. The commentary is distinctive for detailing the abundant negative consequences of the proposed "2016 Tier" ROTF proposals: one is that the higher salaries required to make up for lower retirement benefits will come out of strapped campus operating budgets, insuring more structural crises of the kind the Berkeley campus announced this week.  It is also distinctive for rejecting the Task Force ground rules, meaning both the salary cap on DB pensions for 2016 Tier hires and the mode of its imposition--the back-room deal between two people, Gov. Jerry Brown and UC President Napolitano. The Hare letter notes that the ROTF recommendations "received no positive support," and that their effect would help change UC into "a stepping stone to a better institution rather than a university where faculty invest their lives and careers." Pointing out that since no current employees would be affected,"no comments can be ascribed to self-interest," the Senate letter notes that members saw the ROTF options as "the latest in a series of [UC] compromises to quality."   At a time when Jerry Brown and the rest of the Sacramento Democrats seem bent on making UC average, when even epochal decisions are often made by small, hand-picked executive groups, and when most Task Force members and assorted onlookers treated the cap and  new tier as a done deal, the Senate committees have rebelled.

We cross-post a second piece below. Published yesterday in the Daily Cal under the title, "Retirement Plan Impacts Entire Community," this article by Celeste Langan (an English professor and Berkeley Faculty Association Co-Chair) could also be called, "How Defined Benefit Pensions Support Academic Labor." In addition to offering a useful summary of the critique of the ROTF plan (paragraphs 3 and 6), Prof. Langan ties the need for real retirement security to the early-career sacrifices made by academics of all fields, as they spend the first five to fifteen of their prime earning years on reduced or nonexistent salaries in preparation for their careers. To put it another way, academics in effect subsidize society in the formation of the high grade of "human capital" represented by everyone from anti-viral molecular chemists to pre-Columbian art specialists. Those who later get tenure-track jobs have freer and more interesting work than do most Americans, but the loss of much personal income can reasonably be balanced by DB stability (and efficiency).  Prof. Langan implies that the generic hostility to pensions is undermining the university's ability to reproduce its own existence, and that in any case pensions are not something academics need to be defensive about.

*****

What’s all the fuss over pensions about? Why should you bother reading about retirement benefits, especially when the proposed changes don’t affect current faculty and staff, whose pensions are secure? Surely there are more important concerns in this age of austerity: Aren’t we expecting the campus to announce budget cuts this month? What about lecturers, custodians and parking attendants seeking a living wage, and students faced with rising fees and food insecurity?

Here’s why it matters: Unless we resist, the UC Office of the President is prepared to institute changes to the way faculty are compensated that will accelerate the privatization of the University of California. In effect, UCOP wants to make the remuneration of faculty and staff more and more dependent on the monoculture of “the market,” thereby undermining the partial protection from economic insecurity upon which the intellectual freedom of academic work depends. Although more subtle, the proposed changes are as much an attack on the principles of academic freedom as Wisconsin’s weakening of tenure protection for its university faculty. These are strong claims, I realize, so let me explain.

Pretty much everyone agrees that the only thing wrong with the current retirement plan for UC employees — UC Retirement Plan, or UCRP — is that both the California state legislature and university stopped making payments to it for 20 years — when investment returns were so robust that regular payments seemed unnecessary — until the financial collapse of 2008. Rather than collaborate on a gradual plan to fix the consequence of these suspended payments, however, Gov. Jerry Brown and UC President Janet Napolitano have privately negotiated a deal that places blame for the problem on the structural foundation of UCRP: defined benefits. The agreement is a bad deal, because it will neither significantly reduce the unfunded liability nor yield significant savings for the university. For that reason it ought to be opposed; we should return the proffered $96 million to the state and retain our current system. But we also need to consider more carefully what’s at stake in the attack on “defined benefit” plans such as the UCRP. While there’s been much criticism of Napolitano’s agreement to the PEPRA cap of $117,000 pensionable salary, that’s not the real issue; UCOP has made clear its intention to supplement benefits for higher-earning faculty and staff. The more fundamental interest — made explicit in the FAQs and other documents about the proposed plans — is to shift “risk” to employees. Even before she had appointed her “Retirement Options Task Force,” Napolitano had announced her intention to introduce a full “defined contribution” plan.

The difference between “defined benefits” and “defined contributions” is fairly simple, although the names are confusing. The employer makes “contributions” in both cases (contributions are deferred compensation, where the employee foregoes a higher current salary for future retirement security). In “defined benefits” (DB) plans, the employer invests these contributions, and the risk is lessened by scale; “defined contributions” go directly to the employee to invest privately in IRAs. In DC plans, if you don’t invest wisely, or if the market crashes, your retirement savings are wiped out (as happened to many with DC plans in 2008). The UCRP, by contrast, uses the DB model, described as “golden handcuffs.” Long recognized as the university’s “competitive advantage” in hiring and retaining a dedicated faculty and staff, the UCRP encourages long-term employment because the percentage of pensionable salary is multiplied by years of service. You can more easily dedicate your academic life to long-term projects or to research topics not likely to yield a “commercial application” if you know your retirement benefits are secure.

UCOP defends the shift from DB to DC as “facilitating shared responsibility between UC and employees for individual retirement readiness.” That defense is galling for two reasons. First, the statement suggests that employees have not been sharing responsibility for retirement readiness, despite the obvious fact that employees contribute 7 to 8 percent of their salaries to the UCRP. But what’s almost sinful about UCOP’s moralizing tone is that it entirely ignores the enormous financial risk undertaken by scholars. In order to gain expertise in a discipline, develop an original research project and intern as teachers, graduate students postpone full-time employment for an average of six to 10 years, often taking on debt to pay fees or to supplement inadequate stipends (I remember my elder sister asking me, “Do you know I’ve made $400,000 while you’ve been in graduate school?” That was 25 years ago, and she was only making $50,000 a year). They take on this risk despite the (increasing) scarcity of tenure-track positions. Then, if they are lucky and talented enough to find employment — at the ripe age of 36, the average for assistant professors hired by the university in 2013-14 — they must move to areas such as Berkeley where housing costs are prohibitive. While home ownership has long been an alternative investment strategy for safe retirement, few assistant professors are now able to accumulate the savings that might enable a down payment on a house in or near Berkeley.

It’s clear that UCOP will not realize significant savings by capping defined benefits and paying higher salaries and supplementary contributions to offset the cap. What it would accomplish — and this is why their plan should be opposed — is the erosion of an ecosystem that has allowed research and free inquiry to flourish. Opponents often describe both tenure and defined benefits as obsolete, vestigial privileges. I’d suggest the reverse: The academic “guild” model (long apprenticeship, secure employment and retirement) offers proof that freedom is best protected when workers and thinkers are not subjected to the vagaries of the market, when they’re liberated by long-term investment strategies from the pressures of quick profit and just-in-time production.

The UC Berkeley community received this email this morning. You can find coverage at Inside Higher Ed and The Chronicle of Higher Education.

From: Nicholas Dirks Chancellor

Date: Wed, Feb 10, 2016 at 8:13 AM

Subject: Launch of campus strategic planning and analysis process

To: calmessages_communication@lists.berkeley.edu

Dear Colleagues,

Today, we announce a strategic planning process designed to ensure our excellence in the face of continuing financial challenges.   This process is comprehensive, encompassing academic and administrative realignment, investment in our fundraising and revenue-generating activities, and the reexamination of all our discretionary expenditures, including athletics and capital costs.

Whether in California, Wisconsin, Michigan, or elsewhere, public research universities have been challenged not only by dwindling state support but also by shifting public opinion and momentous social and economic change.  Even without financial challenges, the pursuit of our goals would require that we continually assess the well being of our institution, while simultaneously holding true to our core values.

Now, for a variety of reasons, both internal and external, we face a substantial and growing structural deficit, one that we cannot long sustain. Because this deficit does not reflect a short-term dip in funding, but a “new normal” era of reduced state support, responding to this deficit requires that we take a long-term view. We must focus not only on the immediate challenge, but also on the deeper task of enhancing our institution’s long-term sustainability and self-reliance. This is a moment not just to stabilize our finances, but also to consider our future as a leading institution of higher education. The guide for this effort has to be our core mission: to enhance the educational experience we provide to students while maintaining our commitment to access; to increase the support we provide for ground-breaking research and scholarship; and to align our public outreach with 21st century societal needs.

Accordingly, we are embarking on a comprehensive strategic planning process, the aim of which is to reimagine the fundamental structures and processes of our university. We need to evaluate how best to structure the university so as to maintain, above all, our excellence as an institution. To be sure, ahead of us lie difficult decisions and hard work, but we are fortunate to be taking this on early enough that we have the resources and time necessary to be thoughtful and strategic.

In this effort, we are committed to broad engagement with campus constituencies. Since last June, the senior academic and administrative leadership has been in discussion with the Academic Senate and the deans, the trustees of the UC Berkeley Foundation, our new Board of Visitors, and the Office of the President (which is ready to provide significant financial assistance). Now, as we transition from analysis to comprehensive planning, we want to be sure that Berkeley’s faculty, staff, students, and alumni are well informed. Even as some of the investments we make will be greeted enthusiastically, we also know that some of the changes we will undergo will be painful. Throughout the process, however, it is crucial that everyone work together to ensure both that we make the right decisions and that we make them in the right ways.

Every aspect of Berkeley’s operations and organizational structure will be under consideration.  Our decision-making, however, will be strategic.  We are identifying areas in which new investments will both produce additional resources and enhance our strength; and we are identifying other areas in which the expenditure of resources may be less critical to our overall excellence and core mission.  Some important campus-level initiatives, such as the Berkeley Global Campus and the Undergraduate Initiative, will be entirely supported by philanthropy and external partnerships (aside from small amounts of seed funding).

While our short-term measures – some of which were outlined in our recent budget call letter – are relatively straightforward, our longer-term initiatives will be more complex. These include:

• Evaluating our workforce in relationship to our changing needs and resources. This will also entail a new mechanism for the monitoring and control of staffing levels – mirroring the discipline we have long applied to hiring of faculty. We will also review our senior administrative functions, including central units, to reduce redundancy and create new forms of collaboration. We will complete the assessment and analysis of Berkeley’s workforce and its future needs by the end of the current academic year.
• Improving support for our teaching and research while also redesigning many of our work processes in order to achieve greater efficiency. For example, to better support our faculty’s ability to compete for research grants, we have begun an end-to-end review that includes research support activities in academic units, the Sponsored Projects Office, Campus Shared Services (CSS), and Contracts and Grants Accounting.  The shortcomings in CSS, which we have already begun to address, will continue to be evaluated; we will make all necessary changes.
• Making new investments to expand our fundraising capacity along with other new areas for external support. In order to achieve the best results in this domain, we are also designing a campus-wide approach to philanthropy – one that will increase our endowment, expand our fundraising abilities, improve donor relations and reach out more effectively to supporters. 
• Achieving additional revenues through our “brand,” land, and other assets.  This initiative will ensure that we are earning maximum revenues from licensing and other financial agreements, while protecting our image and being true to our values.  It will also explore ways in which the wise use of our real estate and other assets can both yield revenues and help to address the ever-pressing housing needs of our faculty, staff, and students.
• Working with the Academic Senate leadership and the deans of the schools, colleges, and Letters & Sciences divisions on the redesign of some of our academic structures. Realignment will ensure that we are excellent in all we choose to do, in our research and in our educational mission.  In some instances, this means strengthening units as is; in others, it means narrowing the focus to specific areas of excellence; and in some instances it means combining and rearranging to capture intellectual synergies and to ensure sufficient scale academically, administratively, and financially.  Even if our financial situation were better, these changes make academic sense, ensuring that all our units have a scale, and sufficient support, to mount the strongest programs. This initiative will involve extensive consultation, consideration, and testing.
• Expanding online offerings and enrollments in University Extension, as well as professional and other master’s programs that earn revenue. In addition, over the course of the next few years, financial support for our admitted doctoral students will be improved, while some enrollments will be reduced and brought into alignment with those at peer universities in order to better support the quality of these programs.
• Re-examining the gap between Intercollegiate Athletics’ revenue and expenses, which has widened in recent years.  To reverse this, we are pursuing major opportunities to increase revenues and donor support for scholarships, while looking at ways to reduce administrative costs and other team expenses.

Leadership and Engagement

Executive Vice Chancellor and Provost (EVCP) Claude Steele is leading this effort, with Vice Provost for Strategic Academic and Facilities Planning Andrew Szeri and Associate Vice Chancellor-Chief Financial Officer Rosemarie Rae serving as the implementation leads.

EVCP Steele has overseen the design and establishment of a structure that will provide for engagement and consultation with faculty, staff, students, and alumni, as well as effective leadership of and coordination between the various initiatives. An Advisory Council, to be co-led by Academic Senate Chair Ben Hermalin and Andrew Szeri will provide guidance and input. Final decisions will rest with the Chancellor and a body convened for this express purpose. To support the design and implementation of the individual initiatives, we are also establishing an Office of Strategic Initiatives, which will provide analytical support and coordination to the working teams and leaders of the various initiatives.

We realize that many of you will want to know more, and have many good ideas to offer for our consideration. In the months ahead, we will be engaging with faculty, staff and students in order to share more detailed information, answer questions and solicit suggestions.You will also hear more from the leadership of your school, college, or administrative unit as work on the initiatives broadens and deepens across the campus. We have already briefed and will continue to engage with the leadership of both the ASUC and the Graduate Assembly, as well as Chancellor’s Staff Advisory Committee and the Berkeley Staff Assembly, to ensure that staff and student perspectives, ideas and concerns are well represented and incorporated throughout the planning and implementation process.

The phased implementation of changes and new policies will commence in summer 2016. While we will take some steps quickly, others, such as any significant academic and administrative realignment, will take longer.  To learn more and read regular updates, please visit osi.berkeley.edu.

The Future of Public Higher Education

This endeavor must not be interpreted as an abandonment of our commitment to a public mission nor to our efforts to advocate for increased public funding for higher education.  We are fighting to maintain our excellence against those who might equate “public” with mediocrity, against those who have lost faith in the need for higher education to serve as an engine of social mobility, and against those who no longer believe that university-based inquiry and research have the power to shape our society and economy for the better.  What we are engaged in here is a fundamental defense of the concept of the public university, a concept that we must reinvent in order to preserve.

Berkeley draws strength from its faculty, staff, and students that are second to none – doing excellent and innovative work in research, teaching, and public service.  We rely on a tradition of shared governance with the faculty that will be the basis for the decisions we make and the changes we implement in the months and years ahead.  Even now, we plan to do what we have always done at Berkeley: lead the way, and continue to serve as a beacon for the state, the nation, and the world. 

Fiat Lux.

Nicholas Dirks


Chancellor

The following is a letter sent to Colleagues by the UCSB Faculty Association calling for opposition to the proposed new pension tier.

Dear Colleagues:
We are gratified by the strong response at the Town Hall of the faculty, resisting the unsound pension that UC is proposing to offer new hires starting July 1. Over 1,000 faculty have signed the petition opposing the new tier proposals. We are resending this message to give you an opportunity to join your colleagues by signing the petition if you have not done so. The deadline for making known your opinions regarding these changes is February 16.
Allow us to share with you our reasons for objecting to the current proposal:
1) We share the task force chair's bleak account of the "negative effects of the PEPRA cap on retention and timely retirement" (A guide to reviewing the recommendations of the Retirement Options Task Force, p. 7). In other words, the future of the institution is at stake.
2) We take issue with the fact that while the acceptance of the PEPRA cap is presented as UC's side of the deal with the governor and the legislature, the latter's part of the deal has not been fulfilled:
a) UCRP has NOT been acknowledged as a permanent state obligation;
b) the State's promise "of $436 M for the UCRP over the next three years" to help finance the Unfunded Accrued Actuarial Liability (p.4 of the Task Force report) is a misrepresentation. As Michael Meranze has underlined, the Legislature actually has "not engaged in any multi-year promise". In addition, of the $10.7B or 12B UAAL (numbers depending on market-value or actuarial-value), the hypothetical sum of $436 is only a very small percentage, not accomplishing much. In sum, we object to completing our side of a (bad) deal, when there is no actual commitment on the other side.
3) We take issue with the top-down way this complex issue has been handled. The Task Force had to begin from a declared reality that no one in the UC system other than President Napolitano had a hand in ratifying. This is not shared governance. In addition, the fact that the recommendations of the Task Force, whatever their merit, can be taken or left by President Napolitano further erodes whatever good faith and intellectual effort went into these proposals.
4) We are not convinced by the Task Force's arguments that introducing a Defined Contribution option is fiscally advantageous. No credible empirical evidence exists in the report or in recent economic history to support the assertion. Moreover, the proposed options, in their concern for portability, favor short-term employees over long-term employees, further undermining faculty loyalty to the institution or a commitment to public service.
5) We object to the ramifications of adding a new tier to retirement benefits that creates financial divides between those hired before 2016 and those hired thereafter. Even more, we see these changes as part of a broader national trend to eviscerate tenure and full-time employment. Having to acknowledge such systematic differentials to new hires reduces not only our ability to recruit young faculty but also our pride in doing so as well as our willingness to encourage our students to become university professors.
For more information on this issue, please visit our website at ucsbfa.org.

We urge you to sign the petition to express your opposition to proposed changes to the UC Retirement Plan.
UCOP has also set up a comment link where you can provide your feedback on the task force recommendations. We urge you to express your concerns about the plan there. If you do, please also send a copy of your comments to us at newtier@cucfa.org.
Thank you for your attention to this important matter.
The Board of the Santa Barbara Faculty Association
Julie Carlson
Jorge Castillo
Nelson Lichtenstein
Constance Penley
Erika Rappaport
Elisabeth Weber
Robert Williams